CSCEC ME tells Construction Week why even during the economic crisis, it never halted construction at Al Reem Island’s City of Lights

A considerable amount of time has passed since work began at the City of Lights. The 65.6ha development, situated on Abu Dhabi’s Al Reem Island, was launched by Tamouh back Q1 2008. Owing to the subsequent financial crisis, the first phase of the community – 14 high-rise towers – is now reaching its final stages, with delivery slated before the end of this year.

China State Construction Engineering Corporation (Middle East) (CSCEC ME) secured a $451m (AED1.656bn) design-and-build (D&B) contract to complete five of these towers. When the company arrived at the site in April 2009, the City of Lights represented the first D&B contract that it had undertaken in Abu Dhabi. Six years and three months later, CSCEC ME is finally ready to hand over the towers. Completion is expected before the end of July 2015.

Four residential towers (C2, C3, C10, and C11) and one office tower (C10a) comprise the fruits of CSCEC ME’s labours at the City of Lights. The five buildings straddle one of the development’s main transport routes, currently referred to as ‘road P&Q’. Towers C2 and C3 are perched on the outer side of this road, whilst towers C10, C10a, and C11 have been built on the inner ‘island’. Towers C2 and C3 offer a combined 699 residential units, and a built-up area of 128,280m2. C10 and C11, meanwhile, are slightly larger, with 710 apartments altogether. The latter two sit alongside the 44-storey centrepiece, the C10a office complex, and together, the trio boast a total built-up area of 255,344m2.

Substantial though these towers are, you’d be forgiven for thinking that 75 months on site is a little excessive. And in truth, you’d be right. Initially, CSCEC ME and Tamouh expected to complete by the end of 2011, but as the contractor’s deputy project director and chief representative, Chen Zhonghua tells Construction Week, the global financial crash threw a sizeable spanner in the works.

“We started work at the City of Lights in 2009, and our original completion date should have been Christmas Day, 2011,” he recounts. “It was a 32-month contract – from May 2009 to December 2011.

“We made good progress at the beginning. We finished all of the foundation casting within the space of a month. Between August and September 2009, with strong support and cooperation from Tamouh, we cast almost 40,000m3 of concrete – five towers, each necessitating between 6,000m3 and 8,000m3.”

Unfortunately for CSCEC ME and Tamouh, it wasn’t long before the effects of the financial crisis hit. Zhonghua recalls that the project started to slow down in early 2010, owing to cash flow-related problems faced by both companies.

“This slowed our progress considerably,” Zhonghua explains. “It meant that we could only focus on structural construction because, at the time, [there wasn’t] sufficient finance to support other works.

“We focused solely on structural works, but nevertheless, we continued.”

If not for the ‘never-say-die’ attitude exhibited by both CSCEC ME and Tamouh, the City of Lights could well have become another name on the long list of GCC projects that fell victim to the global economic crash. Impressively, although activities at the project reduced significantly, work never halted altogether.

“A client has a responsibility to its investors,” Zhonghua points out. “There needs to be progress; they need to see movement. This is why when it comes to CSCEC ME’s operations at the City of Lights, there have been no breaks.

“Work has been continuous; we never completely suspended activities at the site. Yes, we slowed down, but work has been going on throughout these past years.

“We have an excellent relationship with Tamouh, which has supported us on this project every step of the way,” Zhonghua continues.

“From 2010 until today, we have worked closely with our partner to secure the financial support necessary to see the City of Lights work through to completion. Together, we have come up with a variety of tactics to attract funds. For instance, CSCEC ME looked into securing investment from the Chinese market.

“CSCEC ME never stops working on projects. This is our intention; to work closely with clients. We appreciate that sometimes, clients encounter problems, but we don’t want to leave jobs half done. Money has been invested, so it’s important to keep going,” Zhonghua asserts.

They may be late, but CSCEC ME’s five towers at the City of Lights are testament to the tenaciousness of both itself and Tamouh. Of course, as with any project of this magnitude, financial challenges were not the only ones do be faced during the development period. CSCEC ME has also had to overcome a series of construction- and logistics-related obstacles in order to complete the project.

The construction of C10a’s circular perimeter columns, for example, posed a challenge due to the elevation of the tower, which is based on an oval-shaped, ‘hour glass’ design. Each of the columns had to be unique, requiring CSCEC ME’s team of surveyors to ensure that each one was set out correctly from top to bottom. This methodology also had to be applied to the concrete ring beams of the roof’s crown.

The elevated nature of C10a also impacted façade work at the site. The tower’s oval shape necessitated differently-sized glass panels, which in turn required precise procurement, supply, installation, and coordination in order to maintain smooth progress and quality finishes, according to the contractor.

Perhaps the most significant challenge outside the sphere of finance, however, was securing access for workers and materials. As Mohammed Faiz, CSCEC ME’s project manager tells Construction Week, diplomacy is vital when working in close proximity to other construction outfits.

“Road construction is ongoing at the City of Lights [site],” he explains. “Access is very limited, so logistically, it can be extremely tight. This challenge was magnified for towers C10, C10a, and C11. Access was particularly limited there because the towers are situated on an ‘island’.”

When asked how the CSCEC ME team managed to overcome the obstacle of access, Faiz smiles and says that delicate negotiations with the infrastructure contractor – a joint venture between Abu Dhabi Land General Contracting and Combined Group Contracting (CGC) – played an important role in meeting the requirements of both parties.

“We have to be kind to [one another] and support [one another],” Faiz remarks.

Despite all the challenges encountered by CSCEC ME during the course of this marathon project, the contractor has taken away a number of positive lessons. Indeed, bolstered by the successful relationship that it has cultivated with Tamouh, and encouraged by overarching changes that have occurred within the Middle East’s construction sector since the economic downturn, the company has developed somewhat of a taste for D&B contracts.

Commenting on the shifting landscape of construction in the Gulf, Zhonghua explains: “In today’s market, competition is extremely fierce. Costs are not obvious; not everybody knows what a cost actually is, so margins have become squeezed. If you’re not managing your projects effectively, you will lose.

“It’s not like it was a decade ago. In 2006 and 2007 in Dubai, the construction market was booming. Everybody was making profits; it was easy because there were more projects and prices were good. Now, in the post-crisis climate, everybody is focused on cost,” he observes.

Agreeing with his colleague on this issue, Faiz laments that the region’s construction sector has retained its post-crisis defensive nature, despite signs of improvement within the market.

Tamouh, he tells Construction Week, represents a rarity amongst Middle East developers, where many outfits have become embroiled in a culture of late payment: “[Nowadays] clients are more aware of the actual costs. In turn, contractors are more aware of cost savings and how to control budgets.

“These are positive trends. One thing that we noticed, however, was that some clients would try to delay payments to contractors. They were trying to reserve their funds. The problem is that now, even though the market is improving, they are behaving in the same way. In fact, this problem is not limited to contractors. Everybody – suppliers, subcontractors, consultants – is facing the same problem when it comes to payment,” Faiz reveals.

With this in mind, the CSCEC ME project manager argues that it makes sense for contractors to increase their involvement with projects from the outset. “I think the best option for contractors is to enter into deals with stakes in projects,” says Faiz.

“Providing of course that the project in question is viable, D&B contracts – with some funding from the contractor’s side – make sense. You have more control over both the projects themselves and payments. In my opinion, this is the way we should move forward.”

Zhonghua adds: “This is the way we [CSCEC ME] are heading. We want to play a part in the financing of projects, and then act as the contractor also.

“The earlier we, the contractor, become involved in the design process, the more chance we get to look into the construction and cost efficiency of the building.”

The City of Lights is the first project on which CSCEC ME and Tamouh have collaborated. There have certainly been challenges along the way, but one thing that has never been in doubt, according to Zhonghua and Faiz, is the relationship between the two stakeholders. The contractor contends that the Al Reem Island development could be the first of many embarked upon by the firms.

“CSCEC ME and Tamouh worked closely together to overcome the challenges presented by the financial crisis,” explains Zhonghua. “Now, the good times are returning and I believe that we will have more projects and more opportunities to work together in the future.”

Faiz concludes: “We are now considering the possibility of other projects with Tamouh. We are trying to finalise some new UAE-based projects with the developer. There are some engineering, procurement, and construction (EPC) projects up for discussion, and other conventional construction contracts; a mixture of the two. These projects are still under investigation.”

Speakers from Kuwait's Supreme Council for Planning and Development and CSCEC ME are at today's

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